This shows that the average share of personal income tax in total taxation increased from 24.1% in 2014 to 24.4% in 2015, while the respective shares of social security contributions and taxes on goods and services (including VAT) fell slightly. Corporate income taxes, which fell significantly during the financial crisis, have not recovered, remaining flat at around 8.9% of revenues.

On aggregate, the average tax-to-GDP ratio rose again in 2016, to 34.3%, compared to 34 in 2015. Increasing tax-to-GDP levels were seen in 20 of the 33 OECD countries that provided preliminary data in 2016, while tax-to-GDP levels fell in the remaining 13 countries.

In 2016, the highest tax-to-GDP ratios were recorded in Denmark (45.9%), France (45.3%) and Belgium (44.2%) and the lowest in Mexico (17.2%), Chile (20.4%) and Ireland (23.0%). The UK’s ratio was 33.2%, compared to 32.53% in 2015.

All but five countries (Canada, Estonia, Ireland, Luxembourg and Norway) have increased their tax-to-GDP ratio since 2009, the post-financial crisis low-point for tax revenues in the OECD, with the majority (18 countries) now reaching or exceeding their pre-crisis high point.

This year’s report also confirms three emerging trends in the OECD average tax structure since the global financial crisis: firstly, the share of income tax in total taxes initially fell, from 23.7% in 2007 to a low of 23.2% in 2010, before increasing steadily to 24.4% in 2015.

Secondly, in contrast, the share of social security contributions and taxes on goods and services initially rose to highs of 26.6% in 2009 and 33% in 2010, before decreasing steadily until 2015, to 25.8% and 32.4% respectively.

Finally, the share of corporate tax revenues fell during the crisis, from 11.2% in 2007 to a low of 8.8% in 2010, and has since remained relatively stable, at 8.9% in 2015.

In 2016, the largest increases in tax-to-GDP ratios were seen in Greece (2.2 percentage points) and in the Netherlands (1.5 percentage points). The largest decreases were seen in Austria and New Zealand, at one percentage point. On average, the OECD tax-to-GDP ratio is now higher than at any point since 1965, including prior peaks in 2000 and in 2007.

The revenue statistics report found that on average, taxes accounted for 82% of total revenues in the OECD in 2015. The share of taxes in total revenues remains lower than prior to the financial crisis, even though the OECD average tax-to-GDP ratio has surpassed pre-crisis levels.

The OECD Revenue Statistics 2017 report is here. 

Report by Pat Sweet